Despite the “Fiscal Cliff” negotiations and the fact that the Federal Government continues to operate under Continuing Resolution Authority (CRA) the Department of Defense continues to execute contract options. Under CRA new ones cannot be awarded but options on existing contracts may be executed. That explains why a production option for the F-35 could be issued even though it is worth over $3 billion.

ATK (ATK), for example, recently received a contract from the Missile Defense Agency (MDA) related to the development of Modular Divert and Attitude Control Systems (MDACS) technology for the Navy’s SM-3 Block IIB interceptor. The SM-3 is a ship launched missile that ultimately places a kill vehicle outside the atmosphere to engage the enemy missile threat.

The recent North Korean launch highlighting potential threats that the SM-3 is designed to perhaps deal with. It was reported that the U.S. and Japanese Navy deployed ships with the SM-3 capability in response to the launch.

Because the kill vehicles are based on ships they cannot use liquid propelled DACS so solid rocket ones must be developed. They are flown like miniature space ships using controlled thrust from little rockets to move them. ATK is working on extending the performance of the DACS systems already used on the SM-3 program.